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The future of legislation that would restrict locally enacted ordinances impacting worker pay and fringe benefits now rests with Gov. Rick Snyder

June 23, 2015

HB 4052 essentially restricts local governments from creating new pay requirements or fringe benefit requirements on businesses above state and federal requirements.  On Wednesday, the legislation was modified by the House to remove a “catch-all” provision that would have limited local government adopting regulations that impact the employment “relationship.”  Adoption of that language is believed to have increased chances Gov. Rick Snyder might sign the bill.  

“I think there was a view that the rest of the bill was adequate to that purpose,” Rep. Earl Poleski (R-Jackson) sponsor of the bill explained of the removal of the “catch-all” language. 

It’s now up to Gov. Rick SNYDER to decide the fate of a proposal that limits rules local governments can place on businesses. However, the version of the bill that the Legislature moved Wednesday is much narrower than the original proposal that passed the House and Senate.

The changes, according to a variety of sources, make the bill more likely to earn Snyder’s approval. 

On Tuesday, the House quietly removed a so-called “catch-all” provision from the bill that would have limited any local policies regulating “the relationship” between an employer and its employees that exceed state or federal standards. Local governments had expressed concern this language was too nebulous and would have led to court challenges. 

The House voted 59-51 to send the new version of HB 4052 back to the Senate. 

This morning, the Senate concurred with the House changes in a 22-16 vote. Then, the House took the procedural step of enrolling the bill, which means it will soon be in front of Snyder. 

Democrats and local governments had previously argued that the vague “catch-all” provision should be removed from the bill but GOP lawmakers had kept the language in place until Tuesday. 

Rep. Earl POLESKI (R-Jackson), the bill’s sponsor, said the removal of the “catch-all” language is designed to avoid unintended consequences. 

The goal of the bill remains the same, however, limiting locals’ ability to place pay and fringe benefit requirements that exceed state and federal requirements on businesses. 

“I think there was a view that the rest of the bill was adequate to that purpose,” Poleski explained of the removal of the “catch-all” language. 

On the other side of the aisle, Rep. Jeremy MOSS (D-Southfield) had previously proposed an amendment to take out the “catch-all” language. 

“The bill is still a bad bill,” Moss said. “But it really takes out the most over-reaching and broadest portion of the bill . . . that’s so indeterminate about its effects on local governments. We can’t legislate language that’s so broad like ‘relationship.'” 

By removing the general “relationship” language, lawmakers are resolving a major concern of local government groups that have argued the language would lead to many unintended consequences. 

Because the generic “relationship” language didn’t point to any specific local policy, like other elements of the bill do, there were questions about what the intention was behind the language. 

Wendy BLOCK, director of health policy & human services for the Michigan Chamber of Commerce, said the “catch-all” section was meant to make sure lawmakers didn’t have to play “whack-a-mole” with future local rules that impact businesses. 

Although the bill doesn’t accomplish everything the Chamber wanted, Block said the Chamber still supports the bill, which she called “good” legislation. 

On Tuesday, the House also removed the retroactivity element of the proposal. That change is key when it comes to the about 18 to 20 municipalities that have local prevailing wage ordinances. 

By removing the retroactivity element of the bill, those local prevailing wage ordinances, which set pay rates for projects involving public dollars, will continue to stand. 

However, they could come to an end at some point in the next year as the Supreme Court considers a case about Lansing’s prevailing wage ordinance — Associated Builders & Contractors v. City Of Lansing. 

The state’s high court is expected to rule on the case some time between now and early 2016. 

If the case goes in favor of the Associated Builders & Contractors (ABC), then all local prevailing wage ordinances could fall. 

Chris FISHER, president of ABC of Michigan, said the latest version of HB 4052 divides local rules that set pay, benefit and other human resources related standards for businesses into two buckets. 

In one bucket are future rules, which HB 4052 targets. In the other bucket are existing rules. 

“The other bucket is being left to be determined through the Supreme Court,” as Fisher explained. 

ABC believes that there is good case law to prove that local prevailing wage ordinances are not permissible. 

“It’s based on the rationale and the belief that local units of government do not have the authority to regulate these matters,” Fisher said. “They are a matter of state concern and exclusively of state concern.” 

However, in a brief introduced as part of the Supreme Court case, the Michigan Municipal League (MML) argued that the Michigan Constitution, the Home Rule City Act and legal precedent indicate it’s up to people in local jurisdictions to decide policies for themselves. 

“It is in these ‘laboratories of democracy’ that the people are permitted to experiment freely, to develop, over time, a government that works for them,” the MML brief says. 

The Court of Appeals ruled in the City of Lansing’s favor. But many in the Capitol believe the Supreme Court is poised to change course. 

The removal of the retroactivity language could be a signal of that belief. But it’s also a signal that lawmakers don’t want to be seen as attempting to influence to the case. 

A variety of sources said today that Snyder wanted both the retroactivity language and the generic employer-employee relationship language removed from the bill. 

By removing those two elements, Snyder, who hasn’t sided with lawmakers who want to repeal the state’s prevailing wage, doesn’t have to sign a bill that strikes down local prevailing wage laws. 

The Senate concurred with the latest version of the House bill in 22-16 vote with no floor discussion. 

Republican Sens. Tom CASPERSON (R-Escanaba), ToryROCCA (R-Sterling Heights), MargaretO’BRIEN (R-Portage), Mike NOFS (R-Battle Creek) and Dale ZORN (R-Ida) joined the Democratic caucus in voting against the legislation.

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